Despite the severity of the shock to the U.S. labor market from the coronavirus pandemic, the earnings of employed workers overall were largely unaffected by the pandemic. Inequality in earnings did rise during last year’s recession, if the unemployed are assumed to have had no compensation. Even so, the spike was relatively short-lived, in keeping with the record low duration of the recession, according to a new Pew Research Center analysis of government data.

Earnings overall have held steady through the pandemic in part because lower-wage workers experienced steeper job losses. Thus, the typical employed worker in 2020 earned more than the typical employed worker in 2019. A slowdown in inflation in 2020 benefited all workers, boosting the purchasing power of their earnings. While unemployed workers lost their earnings, at least some relief came through unemployment insurance, a federal package known as the CARES Act and a moratorium on residential evictions. 

As the pandemic struck, lower-wage workers proved most likely to experience a job loss. The shift toward higher-wage workers among the employed helped to raise the median hourly wage to $23 in the second quarter of 2020.

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